Question $12$ of $40.$

Spencer, a $35-$year$-$old single taxpayer, contributed $$24,000$ to a commercial annuity in $2020.$ The annuity is a nonqualified

plan. In $2023,$ before the annuity start date, Spencer took a $$3,500$ nonperiodic distribution and used the money to pay off his

credit card debt. If the value of the annuity at the time of the distribution was $$32,000,$ how much of the distribution is

taxable?

$$0$

$$2,625$

$$3,433$

$$3,500$